Zombies Invade Teton County

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Matt Hail was developing two subdivisions in Teton Valley when the housing market tanked in 2008. Because of his development agreement, Hail is required to finish the infrastructure in the subdivisions despite having sold only four of the forty four lots.

Matt Hail grew up in sweltering metropolitan Phoenix and spent 11 years selling women’s clothing. Like many other people, he imagined changing his life by moving to some mountain valley surrounded by snow-crested peaks. In 2003, he became a real estate developer near a major resort town, Jackson, Wyoming. He started small by building a house in Alpine, a Jackson suburb. Then he leveraged his equity to make a down payment on 40 acres on the other side of a busy mountain pass, in Idaho’s Teton County.

The towering arrowhead peaks of Grand Teton National Park dominate Teton County’s rural landscape, often given a heavenly alpenglow by the late-afternoon sunlight. In 2003, nearly 200,000 acres, amounting to 67 percent of the county, was undeveloped farmland or otherwise privately owned.

Even better, Teton County’s government was gung-ho for development. And the national real estate boom was finally reaching attractive rural settings. A grand development scheme launched in 2000 signaled the county’s new direction: The Teton Springs Golf and Casting Club aimed to build 600 residential units, a golf course, tennis courts, a swimming pool, hotel, shops and restaurants on 774 acres.

Even before scraping out roads, Hail sold three of his 14 lots. In return, he gained $2.9 million. Acquiring bank loans was easy. So was getting the additional approvals from the county government. In 2007, he paid $2.2 million for another 144 acres. He built a nice rustic barn-style home for himself, next to a pond in one of his developments, and moved in during 2008. Hail was $3.3 million in debt, but still optimistic.

Many farmers who had struggled for decades to grow potatoes or other crops in a hostile climate also thought their dreams had come true. Suddenly they could sell their land for many thousands of dollars per acre. During the 2000s, Teton County became one of the West’s fastest-growing rural communities.

Today, several years into the nationwide recession and housing bust, Teton County is a real estate disaster, probably the worst in the rural West. There are thousands of acres of incomplete subdivisions–nicknamed “zombies” because they look partially or totally dead. About 7,200 lots that were approved and mapped out, or platted, still stand vacant. Many of these vacant lots are marooned without good roads and utilities. The few that are occupied have the air of sheltering castaways.

Like characters in a sci-fi movie, the county government is struggling to cope with the zombies, determined to either reshape them or kill them outright. At the same time, it has to keep spending taxpayer money to maintain the sprawl of access roads and other essential services. The damage to the landscape will take decades to fix.

Hail is one of the real estate casualties. He barely avoided bankruptcy by selling his house and some lots in his first project for less than expected, even less than his costs. He and many others here have learned lessons that go far beyond the obvious one that even the biggest booms inevitably go bust.

The politics of growth in Teton County begins with the Mormons–many of whom are descendants of the original settlers–who owned most of the farmland and allied with developers to keep land-use regulations weak. From 1998 to 2006, the county only had a part-time planning administrator, Larry Boothe, an ex-CIA agent who was a fervent property-rights advocate generally in favor of development. But many of Teton County’s subdivisions were either far from towns, or they formed a continuous suburbanization of farmland extending miles outward from town boundaries. And developers didn’t have to make many concessions to get huge increases in density.

The politics of growth began to shift, though, as newcomers who favored landscape preservation allied with locals who felt the same way. They helped organize a key local conservation group, Valley Advocates for Responsible Development, or VARD, in 2001. VARD wanted subdivisions to be concentrated in and next to towns, rather than creating more rural sprawl.

Teton County’s subdivisions were “chipping away at the very heart of why people come here, and that’s what we were recognizing and why there was some panic in the conservation community,” says Jeff Klausmann, a wetlands scientist. He arrived in 1991 as a fishing guide, and eventually helped create a “wildlife overlay” map that was intended to shape developments to preserve wildlife habitat. He rhapsodizes about the songbirds in the aspen groves at the edges of the farmland, and the 2,000 greater sandhill cranes that migrate through, drawn by ripening barley in the autumn as well as the local wetlands.

By 2006, the Mormon contingent–a proxy for the Old West community–had slipped to roughly 46 percent of the county’s population. That year, voters elected two new Democratic county commissioners who wanted tougher regulations. Then, in 2008, the smart-growth camp won another county commissioner seat in a dramatic fashion: They elected Kathy Rinaldi, a former head of VARD. They thereby gained control of the county government.

But by then, it was mostly too late. The bust had hit, and the county was overrun by zombies. David L. Kearsley, vice president of the local Bank of Commerce, remembers the boom collapsing almost overnight. Before then, “Some of the speculators and developers were offering (farmers) more money than they could see making if they worked for the rest of their lives,” he says. “Then, in August of 2007, it quit. It was like a curtain dropped. We’ve only sold a few crumbs since then.”

Driving east from Driggs, the county seat, toward the Grand Targhee ski resort, you come to a subdivision near the Wyoming border that has streetlights and curving roads, but nothing else. Another development has only a giant horse barn and a smattering of semi-palatial houses. Last March, one of every 175 housing units here was in foreclosure–a rate more than twice the national average.

Angie Rutherford, the county’s planning administrator since 2010, faces many complicated obstacles as she tries to untangle the problems caused by the zombies. Back in the gung-ho era, the county made loose contracts with developers. The county “allowed developers to sell lots to raise money to build the infrastructure,” so once the lot sales stopped, so did the infrastructure, Rutherford says.

If all of the zombies are completed as planned, the county government would suffer at least a $1.9 million annual shortfall in revenue–the difference between the property taxes and the cost of providing road maintenance alone, according to a study done for VARD. The county would also have to spend $15.5 million total on buying more snowplows, hiring more deputies and adding other infrastructure.

Are there any lessons from what’s happened here that might help other rural Western communities sort out the wreckage of their real estate booms and busts? Arizona’s Pinal County, between Phoenix and Tucson, has hundreds of thousands of vacant lots. The West’s newest ski resort–the bankrupt Tamarack Resort in rural Idaho–and the countryside near Bozeman, Montana are haunted by zombies. And so on across the West.

As VARD member Anna Trentadue puts it, “You need to plan and really envision future growth scenarios, and your plan should be unambiguous with very clear zoning and regulations. If you don’t do that, you’re letting your future be determined by whoever walks in the door, and you lose any vision of what your community should be.”

But of course making good decisions, using a lot of foresight, is rarely easy. That’s evident in Teton County’s current effort to craft a whole new comprehensive plan that, theoretically, would incorporate the lessons learned here. The process has revealed that the divide within the community is far from healed.

At the biggest meeting with farmers, held in January, Rutherford presented many ideas for how the new plan could be an improvement. They included downzoning (reducing the allowable densities for subdivisions in rural areas) and more emphasis on “overlays”–the various maps showing wildlife habitat that should be protected. “It was a pitchforks and torches meeting. The answer to everything was ‘no,’ says one attendee.

“It would be nice,” Rinaldi says, “if we could focus on the good things of Old West meeting New West, instead of all the differences and the fear of change.” And it turns out, some good things are happening here lately. The real estate bust hasn’t affected the scenery or the other amenities of life in Teton County, and many of those who’ve been able to hang on here say they like the slower pace.

As for Matt Hail, despite having to downsize to a doublewide, he’s found contentment among the Teton County zombies. He supports the county’s efforts to adopt tougher regulations, and hopes that when the market eventually improves, he’ll be able to make a profit by selling a few lots in a small parcel he still owns. The land is next to a zombie that he hopes will be reconfigured to have more open space and a wildlife corridor.

Allen Best writes about energy, water, transportation and other issues of the Rocky Mountains and Great Plains. Excerpted from High Country News (March 5, 2012), the leading source for regional environmental news, analysis and commentary “for people who care about the West.”

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